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10 July 2008

Advice Price plus four percent?

"Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions" NBER Working Paper Series No. 11053; National Bureau of Economic Research, 2005. (with Syverson, Chad)(PDF format):

In the US real estate agents receive only a small share of the incremental profit when a house sells for a higher value. There is an incentive for them to convince their clients to sell their houses too cheaply and too quickly.
Levitt and Syverson find that homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics.
How that relates to today's market, or Australia's market is open to speculation

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At 10:56 AM, Blogger Bruce said...

Does this apply to Australia?
What incentive is there to go for a price 4% higher?
If you know of any research in Australia we would like to know of it. In the meantime clients should bear in mind that agents might talk them down in price to get a quick sale.


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